Mitsui O.S.K. Lines (MOL) has agreed to collaborate on the development of the Northern Sea Route and the Russian Far East.
The Japanese transport company signed a Memorandum of Understanding (MoU) with the Far East Investment and Export Agency (FEIA) to provide more options for the transportation of Arctic natural energy resources.
It will also use the route to develop containerized trade between Europe and Asia, as the journey by ship is quicker when compared with the traditional route via the Suez Canal.
In an announcement, MOL said the route may reduce costs and CO2 emissions for transportation, stating that it “expected that there will be an increase in the trade of goods, in addition to energy resources, through the Northern Sea Route in the future”.
The agreement, which is part of plans by the Ministry of the Russian Federation for the Development of the Far East (MINVR), also secures MOL's further involvement in the Yamal LNG Project — the world’s first large-scale energy project that exports cargoes through the Northern Sea Route.
MOL has begun developing the first ice-breaking LNG carrier for the project, which slated to go into service at the end of March, following ice-breaking sea trials in Arctic waters.
The carrier has also been proceeding with a feasibility study aimed at establishing an LNG transshipment terminal and marketing complex in the Kamchatka area with PAO Novatek, who is the largest independent gas producer in Russian and the main shareholder of the Yamal LNG project.
MOL’s announcement continued: “With the reduction of ice in the Arctic and the design of new ice-breaking commercial vessels, the transportation of Arctic natural energy resources has become commercially viable.
“In the Arctic area, new projects are following in the steps of the Yamal LNG Project. Asian countries, including Japan, who import energy resources, will welcome the access to new energy sources, particularly with respect to energy security, and it is expected that there will be a significant trade growth in energy delivered through the Northern Sea Route.”
Asian development of the route recently took a large step forwards with China's government, which released a white paper calling on countries around the Arctic to improve international trade by developing a “Polar Silk Road” out of the shipping routes that are opening up as a result of climate change.
Read 'Shipping on the Northern Sea Route', a technical paper on the NSR, which explains more about the term used by Russia to describe the sea area between Novaya Zemlya island in the west to the Bering Strait in the east and out to 200 nautical miles from shore
The Russian Far East is located at the entrance of the Northern Sea Route, making it an important gateway once trade increases.
This is the key element behind the signing of the MoU.
Currently FEIA assists the implementation of several mega-projects, including the development of the Northern Sea Route as a reliable and commercially viable corridor for Russian and foreign goods.
Leonid Petukhov, General Director of FEIA, said: “We hope that MOL will be effectively using the Northern Sea Route for transporting cargos to Japan and other Asia-Pacific countries and jointly we will be able to attract significant investments into the Northern Sea Route infrastructure development. The Agency is ready to help MOL in implementing all its current and future projects.”
Minister for the Development of the Russian Far East Alexander Galushka emphasized that the cooperation between FEIA and MOL will help to strengthen Russian-Japanese economic cooperation and the development of the Northern Sea Route.
Galushka said: “One of our key goals is to create a model for development of the Northern Sea Route as a global transit corridor between Europe and Asia. It is undoubted that this work helps to reinforce Russian-Japanese economic relations.”
